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TCL Expands U.S. TV Distribution Plans

Corona, Calif. -
Now a year since its license to the RCA brand for TV distribution was allowed
to lapse, TCL is taking small steps into U.S. CE retail distribution with a
brand that is well known in virtually every other international marketplace.

For the past year,
the Huizhou, Guangdong, China-based TCL, which is noted as the 25th-largest
consumer electronics manufacturer and the world's sixth-largest television
maker, has been quietly building a following for the TCL brand here using
online resource Amazon.

The online
retailer had an exclusive on the brand until last March, when TCL slowly started rolling out to select
regional players. For this year, the company will supply regional accounts, in
addition to Amazon, before building up to expand into any mass-merchant or
warehouse-club channels.

Tom Chomyn, TCL's
U.S. national sales manager, said the company continues to expand to additional
online and brick-and-mortar retail partners, offering an opening-price-point TV
brand with a better margin, strong image quality and a two-year factory
warranty.

"The difference
between TCL and some of the other TV brands who have come to the U.S. market is
that TCL is on our product, TCL is on our headquarters, and TCL is on our
factory. Not many other tier-three brands can do that right now. We see
ourselves at the top of tier three, but our goal is to be in the top five in
market share in the U.S. in the next five years."

The company is
quietly looking to build brand-name recognition with retailers' regional ads
and is using select media placements, including an appearance of a 40-inch TCL
LCD TV in the new Transformers movie, "Transformers: Dark of the Moon," premiering
today.

Joseph Sannella,
TCL U.S. sales and product development manager and longtime veteran of the RCA
TV businesses under both Thomson and TCL (through the defunct TTE), said the company's
new U.S. strategy is to center on "the market sweet spot" and to differentiate
the brand's distribution strategy.

"With the RCA
brand, we were a mass-market kind of player, but with the TCL brand we are
looking at a regional distribution strategy, partnering with really strong
regional retailers," Sannella said. "You're not going to see TCL product at
Walmart or on the floor at Best Buy. But you will see it on the floors of guys
like Nebraska Furniture Mart, R.C. Willey, Vans and other really strong
regional accounts like those."

At least for the
time being, Chomyn and Sannella will be handling the company's sales to each
account on a direct basis before opening up to include key buying groups like
NATM, Chomyn said.

Chomyn, who has more
than 20 years of CE experience working for both Panasonic and LG, said he is
not looking to use distributors to avoid small dealers taking the product to
the Internet and advertising prices that make or lose $5 to $10 per item (while
carrying as little as five pieces) disrupting the landscape for everyone else
in the process.

TCL will maintain
warehousing in California, from where it will ship to the rest of the country.

Sannella said TCL's
products are targeted to consumers by using a strong value message, and
offering fair prices and quality manufacturing that it will underscore with its
two-year warranty.

The initial TCL
line will feature six LCD TVs that have been running with Amazon.

These include three
models with CCFL backlighting and three with LED edge lighting.

The CCFL LCD line
includes the 26-inch ($249 suggested retail), 32-inch ($299) and 40-inch ($449)
screen sizes, while the LED line offers 19-inch ($169), 24-inch ($219) and
32-inch ($399) screen sizes.

The 40-inch CCFL
model and 24-inch LED model both feature 1080p/60Hz panels, while the remaining
models offer 720p resolution.

All models include
HDMI and VGA (PC) inputs to serve as both TV displays and PC monitors for
dorm-room applications.

TCL is working
with IDEO in the design process to develop a distinctive look. The CCFL models
will feature a high-gloss black cosmetic. The LEDs will sport a 1.5-inch bezel
around the screen and a brushed-black cosmetic with one model adding a
glass-faced crystal trim.

For the future,
the company is looking to add larger screen sizes and possibly some step-up
features, including Internet apps and 3D capability.

"We're trying to
go in to get some market share this year using some hot-selling pieces rather
than going in with 46- and 55-inch screen sizes [whose sales rates] fluctuate
weekly," Chomyn told TWICE. "We have those larger screen sizes in other places
in the world, but we want to start out here by focusing on the nuts and bolts
of the industry, which right now is 32- and 40-inches."

Starting in
August, TCL plans to open its new 8.5 Gen LCD plant, called China Star, in
partnership with Samsung, which took a 15 percent stake in the operation,
Chomyn said.

"It will be
completely vertical. We will be building the glass, the parts and everything
for TVs," he said, pointing out that the company will continue to maintain a
sizeable OEM TV business as it grows its own TCL lines. "So next year, we'll
have 14 million more TVs to sell."